Regulated Trading and Investing
Rule of Thumb
Regulated trading is something all traders should do as a rule of thumb. Trading on an unlicensed exchange or with an unlicensed broker is extremely risky. The broker or exchange can take the money you have deposited and you may never hear from them again.
There are hundreds of thousands of stories each and every year of people being scammed by unregulated and unlicensed offshore exchanges and brokers and most of them are never able to recover their funds.
This is why trading and purchasing cryptocurrencies only with regulated exchanges and brokers should always be a rule of thumb. If a regulated firm makes a “mistake” with an investor or trader, they can receive a large fine from the regulator and loose their license. They also have to adhere to strict rules regarding separation of client and firm funds and can not use any types of deceptive marketing or sales tactics when it comes to their clients.
How To Tell if a Firm Is Regulated and Licensed?
This is actually not very hard to do. Firms and brokers or exchanges will usually be regulated by FCA, SEC, ASIC, CySEC or another financial watchdog. If you are surfing the exchange website you can usually scroll down to the bottom of the website where there will be a disclaimer regarding licensing and regulation.
If the exchange says it is licensed by the FCA for example you can go to the FCA website and use their search window to quickly search the name of the exchange and see if their license is authorized and if they have received any fines or warnings.
If the exchange or broker you are planning to use for cryptocurrency trading or for purchasing cryptocurrencies is not regulated or licensed by one of the top regulatory agencies then don’t risk your money with them!